News

CFC-supported auto body repair regulations approved

January 7, 2013

California Department of Insurance (CDI) Commissioner Dave Jones announced last Friday that new consumer automobile regulations regarding the use of non’original equipment manufacturer (OEM) replacement crash parts, generally known as aftermarket parts, have been approved and are expected to become effective on January 30, 2013.

The regulations were sought by the Consumer Federation of California and other groups to protect consumers from physical and financial harm caused by defective or inferior aftermarket auto parts and to enhance insurer accountability in the claims process.

If insurers had had their way, they would have been able to cut costs by using cheap imitation parts when they pay for a repair. In August, they planned to introduce an end-of-session bill that would stop the Insurance Commissioner from enforcing vital consumer protections.

But they weren’t successful.

‘The amendments build on existing protections by requiring insurers to settle automobile insurance claims using repair standards described by the Bureau of Automotive Repair, and not the insurer’s own standards of repair,’ said Commissioner Jones.

Specifically, the new regulations will strengthen and enhance current law by:

‘ Requiring an insurer to pay for the costs associated with returning a defective part and the cost to remove and replace the defective part with a compliant non-OEM part or an OEM part;
‘ Requiring the current insurer’s warranty be expressly stated in the estimate of repair generated by the insurer;
‘ Requiring an insurer to cease use of a part known to be non-compliant, and to notify the part distributer within thirty (30) days; and
‘ Requiring an insurer to pay for an amount to repair the damaged vehicle to its pre-loss condition in a good and workmanlike manner, based upon the repair standards required by auto body repair shops licensed by the Bureau of Automotive Repair.

‘We shouldn’t have to worry that automobile insurance companies are cutting corners and using inferior products,’ said Richard Holober, Executive Director of the Consumer Federation of California. ‘We had opposed an end-of-session bill that would have derailed consumer protections – and are delighted that these new regulations will place greater accountability on the insurer to repair cars properly and safely.’